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Jones Products manufactures and sells to wholesalers approximately 200,000 packages per year of underwater markers at $3.82 per package. Annual costs for the and sale
Jones Products manufactures and sells to wholesalers approximately 200,000 packages per year of underwater markers at $3.82 per package. Annual costs for the and sale of this quantity are shown in the table. production 256,000 Direct materials Direct labor Overhead Selling expenses Administrative expenses 64,000 192,000 80,000 53,000 645,000 Total costs and expenses $ A new wholesaler has offered to buy 33,000 packages for $3.48 each. These markers would be marketed under the wholesaler's name and would not affect Jones Products' sales through its normal channels. A study of the costs of this additional business reveals the following: Direct materials costs are 100% variable. Per unit direct labor costs for the additional units would be 50% higher than normal because their production would require overtime pay at 1% times the usual labor rate
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